Samuel stands by Telstra broadband decision

Competition chief Graeme Samuel has acknowledged the financial risks Telstra Corporation must take to invest in broadband, but has stood by the regulator's past price setting decisions.

Mr Samuel, the chairman of the Australian Competition and Consumer Commission (ACCC), said tonight the regulator must tread a path between ensuring adequate competition and not hampering the ability of companies to invest.

Last week Telstra launched an action in the High Court challenging the ACCC's price setting powers.

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Telstra is currently mandated by the ACCC to sell its broadband infrastructure to competitors for $3.20 a month, a level it considers to be a record low that inhibits its ability to achieve a fair commercial return on its investment.

But Mr Samuel told the Sydney Institute tonight that the ACCC is bound by law to have regard to the risks involved in making an investment.

"It is not possible for us, under the law, to adjudicate or determine that prices that can be paid, for example, for Telstra are below their costs," Mr Samuel said.

"It's not possible for us to impose on Telstra shareholders changes to impositions and access arrangements relating to their copper wire network that results in them receiving payments below their costs."

Mr Samuel said tonight that Telstra had every right to challenge the ACCC decision.

"It's an appropriate exercise of a legal right to challenge our ability to emphasise certain powers of regulation."

Mr Samuel said the ACCC would continue to administer the law throughout the High Court challenge as it bound to under the Trade Practices Act.

Mr Samuel also told the Sydney Institute that the ACCC had had a number of challenges to its decisions over the past 12 months.